Brazil: Disinflationary trend ends
August 8, 2012
In July, consumer prices increased 0.43% over the previous month, which was above both the 0.08% rise recorded in June and market expectations of a 0.37% price increase. The result mainly reflected higher prices for food and beverages. As a result of the monthly price rise, annual headline inflation rose from 4.9% in June to 5.2% in July, thus breaking the declining trend initiated in October 2011. Nevertheless, inflation remains within the Central Bank's target of 4.5% with a tolerance margin of plus/minus 2.0 percentage points. The Central Bank expects inflation to decline to 4.4% by the end of 2012 and to accelerate to 5.2% by the end of 2013.